Jackson Company acquires 100% of the stock of Clark Corporation on January 1, 2020, for $4,100 cash. As of that date Clark has the following trial balance: Debit Credit Cash $ 500 Accounts receivable 600 Inventory 900 Buildings (net) (5 year life) 1,600 Equipment (net) (2 year life) 1,000 Land 900 Accounts payable $ 400 Long-term liabilities (due 12/31/22) 1,900 Common stock 1,000 Additional paid-in capital 700 Retained earnings 1,500 Total $ 5,500 $ 5,500 Net income and dividends reported by Clark for 2020 and 2021 follow: 2020 2021 Net income $ 120 $ 140 Dividends 40 50 The fair value of Clark’s net assets that differ from their book values are listed below: Fair Value Buildings $ 1,200 Equipment 1,350 Land 1,300 Long-term liabilities 1,750 Any excess of consideration transferred over fair value of net assets acquired is considered goodwill with an indefinite life.
Jackson Company acquires 100% of the stock of Clark Corporation on January 1, 2020, for $4,100 cash. As of that date Clark has the following
A. Compute the amount of Clark’s equipment that would be reported in a December 31, 2020, consolidated
B.
Compute the amount of Clark’s buildings that would be reported in a December 31, 2020, consolidated balance sheet.
C. Compute the amount of Clark’s long-term liabilities that would be reported in a December 31, 2020, consolidated balance sheet
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